Conservatives propose Stamp Duty Abolition if elected

At this year’s conservative party conference, conservative leader Kemi Badenoch unveiled a proposal to abolish stamp duty for UK residents purchasing their primary residence. This move, aimed at boosting home ownership and market activity, has generated both excitement and concern across the property and financial sectors.

Under the proposed policy, UK residents buying their primary residence would no longer be required to pay stamp duty. However, the change would not extend to second homes or company-owned properties, and would only apply in England and Northern Ireland, unless devolved governments in Scotland and Wales choose to adopt similar measures.

For many homeowners, stamp duty has long been a financial barrier to moving house. Eliminating it could make it easier for families to upsize, downsize, or relocate, potentially unlocking greater mobility and flexibility in the housing market. It may also have positive effects across related industries such as removals, furniture retail, and home improvement services.

Politically, the proposal is likely to appeal to middle-income households and aspiring homeowners, especially in regions where property prices are high and stamp duty costs are significant. First-time buyers already have an exemption applied where they do not pay stamp duty up to the first £300,000 of the purchase price, and so there is limited benefit unless they are purchasing over £300,000.

Despite its potential benefits, the proposal has drawn criticism from economists and housing experts. One major concern is the impact on public finances. Stamp duty generated nearly £14 billion last year, and replacing that revenue could require cuts to public services or increased borrowing. There’s also the issue of fairness. While first-time buyers already enjoy exemptions on properties up to £300,000, the new policy would disproportionately benefit wealthier buyers purchasing high-value homes. This could widen the gap between different segments of the housing market.

Another risk is price inflation. If stamp duty is abolished, demand could surge, pushing up property prices - particularly in already competitive areas like London and the South East. This could ultimately cancel out the savings for buyers and make affordability worse in the long term.

For those considering a move, the timing of this policy could be crucial. If the proposal gains traction but isn’t implemented immediately, it may cause delays in the market as buyers wait for confirmation. On the other hand, if enacted swiftly, it could present a valuable opportunity to save thousands on a property purchase. So, it is important to keep a close eye on developments and consider how this policy might affect your plans.

This article isn’t personal advice. If you’re not sure whether a course of action is right for you, ask for financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage.